Singapore Bourse to Offer Kilobar Gold Contract

The largest bourse operator in Southeast Asia, the Singapore Exchange, will offer its first ever kilobar gold contract next month.

The 25 kilogram, 99.99 percent purity, wholesale contract will be available for trading on October 13th, the World Gold Council and Singapore Bullion Market Association announced today. Initial plans for the contract were first announced in June, but a firm date had not been set for initial sales.

This kilobar contract comes on the heels of an announcement by the Chicago Mercantile Exchange to offer the first-ever Hong Kong-based gold contract for physical delivery and the recent opening of the Shanghai Gold Exchange in the city’s new Free Trade Zone. All three efforts are part of a push for greater regional influence on pricing benchmarks.

Albert Cheng, Secretary of the Singapore Bullion Market Association said in an interview today that “The launch of the Singapore contract, in addition to what has happened in Shanghai, is a reflection of the importance of Asia to the global gold market.”

Last year, Asia accounted for nearly 70% of total worldwide gold consumption, with China surpassing India as the world’s largest buyer.

Since the government of Singapore made a 7% reduction in taxes on investment-grade gold and silver products in 2012, the country has been working to promote the country as a center for precious metals. 16 companies have been approved for “good delivery” of the new contract.

Participating banks will be required to hold 2 tons of gold within Singapore with another 2 tons held elsewhere in the region.